Correction: An earlier version of this post incorrectly stated that credit card penalty fee rules were part of the financial regulation bill; they are part of the Credit Cardholders’ Bill of Rights.

The Obama administration is launching a renewed lobbying effort behind the South Korea free trade agreement. Meanwhile, Obama and Education Secretary Arne Duncan are reaching out to teachers unions after months of acrimony. And despite widespread opposition and imminent EPA regulation, the construction of old-style coal plants shows no signs of abating.

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The administration is gearing up for a new push on the South Korea free trade pact, reports Howard Schneider: "The agreement would eventually eliminate tariffs between the two countries. Because those levies are typically higher on the South Korean side, administration officials estimate the deal could mean more than $10 billion annually in increased U.S. exports to Seoul and tens of thousands of new U.S. jobs. South Koreans say they would benefit from lower prices -- some tariffs on food imports from the U.S. are as high as 40 percent -- and a more efficient flow of investment in and out of their country."

Teachers unions and the Obama administration are undergoing a rapprochement, reports Kendra Marr: "Just last month, delegates at the NEA convention took a position of 'no confidence' on Race to the Top, the administration’s multi-billion-dollar sweepstakes to encourage schools to adopt Obama-backed policies. 'Today, our members face the most anti-educator, anti-union, anti-student environment I have ever experienced,' Van Roekel told thousands of attendees. But the union president has since dialed it back. 'Everyone assumed I was only talking about the Obama administration,' he told POLITICO. 'I was talking about states, too.'"

32 traditional coal plants have been built since 2008 or are under construction, reports Matthew Brown: "Approval of the plants has come from state and federal agencies that do not factor in emissions of carbon dioxide, considered the leading culprit behind global warming. Scientists and environmentalists have tried to stop the coal rush with some success, turning back dozens of plants through lawsuits and other legal challenges. As a result, current construction is far more modest than projected a few years ago when 151 new plants were forecast by federal regulators. But analysts say the projects that prevailed are more than enough to ensure coal's continued dominance in the power industry for years to come."

Still to come: Credit card fees are rising; beneficiaries from the $20 billion BP spill fund will have to waive the right to sue; $30 billion in tech spending is under scrutiny as the administration looks for budget cuts; and a contraption to turn plastic products back into oil.

Economy/FinReg

Following penalty fee regulations taking effect yesterday, credit card rates are at historic highs, reports Ruth Simon: "In the second quarter, the average interest rate on existing cards reached 14.7%, up from 13.1% a year earlier, according to research firm Synovate, a unit of Aegis Group PLC. That was the highest level since 2001. Those figures look especially stark when measuring the gap between the prime rate -- the benchmark against which card rates are set -- and average credit-card rates. The current difference of 11.45 percentage points is the largest in at least 22 years, Synovate estimates."

Housing wealth is down and won't recover for a long time, reports David Streitfeld: Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up. 'People shouldn’t look at a home as a way to make money because it won’t,' Mr. Baker said. If the long term is grim, the short term is grimmer. Housing experts are bracing themselves for Tuesday, when the sales figures for July will be released. The data is expected to show a drop of as much as 20 percent from last year."

There is still considerable disagreement within the administration on an expected housing overhaul, reports Zachary Goldfarb: "One option under consideration is simply to require mortgage lenders to provide a portion of their loans to affordable housing, essentially putting the burden on the private sector. Another idea being discussed is to put the onus on government agencies such as the Federal Housing Administration, which makes loans to borrowers who cannot afford to make a standard down payment. A third choice would be a hybrid...the government could make private firms pay a fee into a federally administered fund that would subsidize affordable housing."

Paul Krugman breaks down who benefits from making all of the Bush tax cuts permanent: "The policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few -- the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year -- would be $3 million over the course of the next decade."

A panel of experts proposes everything from benefit cuts to increased immigration to keep Social Security solvent.

CFOs are systematically poor economic forecasters, writes Richard Thaler: "This puts a new light on the recent comment by Ben S. Bernanke, the Federal Reserve chairman, that the economic outlook was 'unusually uncertain.' Although I instinctively share that assessment, these results suggest that it may be an illusion: Yes, things feel more uncertain after bad times, but severe market downturns tend to occur after long bull markets when we are feeling least uncertain. In the C.F.O. survey conducted in mid-2007, for example, the average lower bound was for a market return of 0.2 percent in the next year. In other words, the worst-case scenario anticipated by the group was a flat market. Of course, the market was soon to begin its plunge."

Victims of the BP spill must waive their right to sue in order to receive compensation from the $20 billion spill fund, reports Angel Gonzalez: "Mr. Feinberg said claimants could file claims for up to six months of emergency payments between Monday, Aug. 23, and Nov. 23, a 90-day period. He said claimants won't have to waive any rights to sue BP if they receive emergency payments, and that there is no maximum limit for payouts. In addition to emergency payments, claimants can also apply for a lump sum final payment to settle their claim. Mr. Feinberg said that individuals should expect to receive payments 48 hours after finalizing a claim, and businesses would be compensated within seven days."

The administration predicted 23,000 lost jobs from the deep-water drilling ban, report Stephen Power and Leslie Eaton: "They show the new top regulator or offshore oil exploration, Michael Bromwich, told Interior Secretary Ken Salazar that a six-month deepwater-drilling halt would result in 'lost direct employment' affecting approximately 9,450 workers and 'lost jobs from indirect and induced effects' affecting about 13,797 more. The July 10 memo cited an analysis by Mr. Bromwich's agency that assumed direct employment on affected rigs would 'resume normally once the rigs resume operations.'"

Mining waste heaps are providing an unlikely home for renewable energy sources, writes David Rosenfeld: "Hundreds of proposed abandoned mine sites have been floated by the U.S. Environmental Protection Agency for renewable energy projects under a two-year effort called Re-Powering America’s Land. The program encourages private developers to transform abandoned mines, landfills, Superfund sites and brownfields into something positive. In some cases, the energy produced actually helps power cleanup efforts such as filtering contaminated groundwater."

Thomas Homer-Dixon outlines the effects of continued Arctic warming: "The limited slack in the world’s food system, particularly its grain production, can amplify the effects of disruptions. Remember that two years ago, when higher oil prices encouraged farmers to shift enormous tracts of cropland from grain to biofuel production, grain prices quickly doubled or tripled. Violence erupted in dozens of countries. Should climate change cause crop failures in major food-producing regions of Europe, North America and East Asia, the consequences would likely be far more severe."

The OMB is considering overhauling 26 tech spending programs as a part of budget cut efforts, reports Amy Schatz: "A $7.6 billion Interior Department project to consolidate technology systems is also on the list, after Obama administration officials found that despite spending $3.25 billion so far on 200 data centers and 9,000 servers, employees aren't even on the same email system. ... Technology companies and federal contractors have privately raised concerns about the Obama administration's broader review of technology spending, arguing that delays and cost overruns often occur because federal officials change their requirements for the projects."

Salmonella outbreaks could have been prevented by a recent change in the federal food regulatory structure, reports Timothy Martin: "The new rules, had they been in place before July 9, "could have prevented" the outbreak, Sherri McGarry, emergency coordinator for the FDA's Center for Food Safety and Applied Nutrition, said in a conference call last week. Ms. McGarry said the FDA had not investigated Wright County Egg, the producer at the center of the FDA's investigation, because it didn't have authority to inspect farms until July 9. Attempts to reach the USDA for comment Sunday were unsuccessful."

Obama's weekly address renewed a push for the DISCLOSE Act, reports Abby Phillip: "'They can buy millions of dollars worth of TV ads -- and worst of all, they don’t even have to reveal who is actually paying for them,' the president said. 'A group can hide behind a phony name like Citizens for a Better Future, even if a more accurate name would be Corporations for Weaker Oversight.'"

so basically because teachers unions weren't getting their egos stroked they slapped back at the administration's race to the top which is meant to benefit students. NICE. That'll help with their image.

And as far as the thought that they're all hated I disagree. No one is anti-educator. They teach our kids and certainly no one is anti-student, they ARE our kids. Guess that just leaves the NEA and UFT.

"Housing wealth is down and won't recover for a long time, reports David Streitfeld: Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005."

that means that there wont be recovery in my lifetime.

that really changes your perspective of optimism.
and who knows, what things might be like in twenty years.
some people may be living in caves, like the anasazi...with fires to keep them warm....and a completely different way of life, carved out by being so poor.
maybe people will return to the wilderness that is left, to escape the cities,where there may be little prospect for a safe or happy life for very impoverished people.
i wonder what things will be like.
what might it be like in twenty years.

Yep, it's the Soviet Unionization of the United States. Just wait until health care "reform" really kicks in, and FinReg rolls all the way through it all, and interest rates begin to rise and send the service on the U.S. debt through the roof.

And the kids still flop out of places like Harvard with the collectivist dream wedged in the narrow spot between their ears...

Gee, I don't see any gulags in those places. And the people there seem quite content and proud overall with their "socialist" gvmt.

What you don't get is that most of freedoms we have lost have been lost under conservatives; indeed, conservatives RULE the US courts. Just try videotaping or talking back at a policeman in the wrong US county if, for example, you are stopped for simple speeding.

Or ask gays whether liberals or conservatives are affecting their lives more.

Or ask medical MJ users who affects them more.

Or ask people suing surgeons because of botched surgeries who will affect them more if the GOP gets their way regards to lawsuits (even as the GOP is the most prolific abuser of the courts to achieve their ideological ends).

Or ask the husband of Terry Schiavo whether it was Republicans or Dems who went bonkers.

Or ask the NY mosque people.

Or ask people who have 30 percent interest on credit cards to see if their rates will get any higher after financial reform.

I'd be curious to hear you enumerate which freedoms you lost and when you lost them.

"The sponsor of the Card Act, Rep. Carolyn Maloney (D-NY), said that despite the rising rates, the law benefits consumers because it eliminates unwelcome surprises and provides them with a clear picture of the costs they will face. "Better that consumers should know up-front what the interest rate is, even if it's higher, than to be soaked on the back-end by tricks and hidden fees."

"At Discover Financial Services, a diminished ability to boost rates is causing the Riverwoods, Ill., company to offer fewer interest-free balance transfers for new customers, says Discover President Roger Hochschild. Balance transfers have declined 60% from last year. A typical offer might include 0% interest on the transferred amount for a year, with customers paying a balance transfer fee."

Yeah, this looks like a clear win for consumers. Fewer easy to avoid fees, but higher interest rates and more difficulty transfering balances.

This is a completely unsurprising result, and now Rep Maloney is trying to save face by claiming consumers are better off knowing what they are paying, even if they are paying more.

the sad thing is you can translate the same thing to healthcare and have a very similar result. They're already backing away from the "deficit reduction" talk and trying to talk up all the consumer goodies in there. Well except when it comes to the high risk pools where nearly two thirds have been deemed ineligible and the covering of dependents to age 26 where some are covered now, many are not and no one seems to know the rules. Just imagine the chaos when the exchanges open. Let's hope they get their acts together before then but if the past is any harbinger of future results look out. its going to get ugly.

--"What you don't get is that most of freedoms we have lost have been lost under conservatives;"--

Doubtful, but even if I grant some of it, nothing justifies, say, Medicare, or government incompetents trying to make home owners of everyone irrespective of basic economics, or bullying around in the automobile industry, or any of the other thousand intrusions inflicted over decades, because you end up with this: "that means that there wont be recovery in my lifetime." Those are YEARS stolen from real people's LIVES. By The State! In an ostensibly free country!

Go to Canada. Go to France. Try it a while. I don't think most Americans would like it.

"Well except when it comes to the high risk pools where nearly two thirds have been deemed ineligible and the covering of dependents to age 26 where some are covered now, many are not and no one seems to know the rules. Just imagine the chaos when the exchanges open." posted by visionbrkr

I read recently that insurers in Florida have notified the state insurance commission that they will no longer write individual coverage for children. They will keep existing policies in effect, but will no longer write new ones for fear that guaranteed issue will mean that the bulk of new policies would be for covering high cost preexisting conditions and will raise costs for existing customers.

Gee. The gov tries to rig the market against the insurers, and the insurers refuse to play. Who knew?

--"I checked three times, but nothing in your response to me smacks of last rights of the nature that allow you to claim we are like the Soviets."--

Ah, so that's what you were shooting for. You're looking for the gulags, when I was referring to the central planning. Certainly, though, you must admit that the jails are full. And the system is so larded up with the produce of the beavering political elites that we are all now criminals in one way or another, most of us just hoping not to attract the attention of the wrong individual who knows how to work the levers, and has no compunction doing so in service to his own ends.

And so you have convinced me: The proper response to the idiocy of the War on Drugs is to force people to buy health insurance. (And Barry O. would dearly love to abolish the government decrees against marijuana but those filibustering ReThugs just won't let 'im.) The way to counteract ignorant thug police threating people who film them in public is to have corporate rejects at the FCC slobber over every merger and acquisition taking place in the free market. The proper method of insuring that people don't load themselves up with debt that they'll never be able to repay is to make it more expensive for everyone to access lines of credit, especially those responsible enough not to get into trouble.

It is sad. I definitely won't be counting on the politicians getting their acts together.

I look at the estimates for employer vs. exchange coverage, and I see that in 2019 the CBO projects only 3 million fewer people covered by employers and only 24 million covered by the exchanges. Per ADP there are 48 million employees (probably representing ~100 million people including spouses/children) in businesses ranging from 1-49 employees, which receive no penalty from dropping coverage. What if the actual exchange population ends up being 72 million rather than 24 million? For the vast majority of people, the subsidies in the exchange are much higher than the tax subsidy.

http://www.cbo.gov/doc.cfm?index=11379

Another issue. Use the calculator below, and enter 400 percent of the poverty level in 2014 for a family of four (45 y/o head of household) in a medium cost area - you get a $5,344 tax credit. You put in 401 and recalculate, and you get a $0 tax credit. Earning $240 increases your tax bill by $5,344 (plus whatever your marginal rate is on the $240). More fool the poor slob who manages to earn $96,001 rather than $95,999. No one in their right mind is going to want to earn $95,000 - $103,000 or so.

Try it again with a 56 year old boomer in a high cost area. The tax credit is a whopping $15,545 at 400 percent of the poverty level. At 401 it goes to $0.

Let's say at two earner family makes $100,000, with the prime earner making $64,000. The tax credit at $64,000 is $18,864. At $100,000 it is $0. The tax credit alone represents a 50% marginal tax all by itself. Subtract out FICA (which is pure waste for married couples anyway), and regular income tax and the loss of household production and the second earner might well throw up their hands and not work.

This reduces GDP, tax revenue and increases the subsidy cost.

http://healthreform.kff.org/SubsidyCalculator.aspx

I'm not smart enough to predict how precisely this will play out, but I will hardly be surprised if Nancy Pelosi pulls a Maloney and says well look, this family making $64,000 could never buy care on their own, so its good we passed PPACA despite the subsidies costing the government 3x what was originally projected.

That should read "threatening" and "FTC". The FCC, too, is a festering carbuncle on the American corpus, but it's the ghouls at the FTC who hold sway over mergers and acquisitions, alá the Soviet commissars of old.

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